Senate and SEC Unite to Tackle Unclaimed Dividends Crisis
In a concerted effort to resolve the issue of unclaimed dividends, the Senate Committee on Capital Market, the Securities and Exchange Commission (SEC), and key stakeholders convened on Monday, agreeing to develop actionable strategies. This agreement emerged from a one-day public hearing aimed at formulating a lasting solution.
The forum, apart from recommending further amendments to the Finance Act, emphasised the need for extensive public awareness about SEC’s activities. Participants urged SEC to utilise modern technology to identify the rightful owners of unclaimed dividends and to compile comprehensive data on these funds.
All parties concurred that Dr. Emomotimi Agama, Director-General of the Securities and Exchange Commission, should present the Senate panel with detailed strategies within six months on how to reclaim unclaimed dividends held by the Debt Management Office (DMO). Stakeholders argued that the DMO should not retain 10% of these funds, a provision currently supported by the Finance Act.
Opening the event, Senate President Godswill Akpabio highlighted the forum’s objective to uncover the root causes of unclaimed dividends and forge a path that empowers investors, safeguards their interests, and unlocks the full potential of the capital market.
Osita Izunaso, Chairman of the Senate panel, underscored the necessity of legislative measures to restore trust and confidence in the capital market. He stated, “The key takeaway is trust. The capital market is built on trust, and its erosion since the 2018 crash has deterred many from investing. It is our collective responsibility to rebuild this trust.”
Izunaso pointed out that declared dividends over five years amounted to N5 trillion, indicating an annual average of N1 trillion. He suggested that with increased promotion, the stock market could generate even greater returns.
He challenged the SEC DG to intensify efforts in identifying owners of unclaimed dividends through broad-based public enlightenment. Izunaso said, “Strengthen the Know Your Customer (KYC) requirements and simplify the account update process for banks. If there is a website where shareholders can access all relevant information, it must be widely publicised or created if it does not exist.”
Izunaso stressed the importance of addressing shortcomings in financial institutions’ infrastructure and leveraging technology. He added that the National Assembly has a role to play, particularly in amending the Finance Act to delineate responsibilities among institutions more clearly.
He also expressed reservations about the Minister of Finance chairing such institutions, suggesting that the role requires undivided attention, which may be compromised by the minister’s other duties.
The public hearing underscored a collective commitment to restoring confidence in Nigeria’s capital market, ensuring effective management of unclaimed dividends, and safeguarding investor interests through legislative and technological advancements.
